YPF upgrades refinery in western Argentina

YPF, the oil company controlled by the Argentine state following the expropriation of a 51 percent stake from Spain's Repsol, said it completed an overhaul of its Lujan de Cuyo refinery in the western province of Mendoza.

President Cristina Fernandez and YPF CEO Miguel Galuccio unveiled the upgrades during a ceremony Wednesday at the refinery.

The overhaul cost 2.6 billion pesos (about $490 million), making it the biggest infusion of capital into the refinery in the past 25 years, YPF said in a statement.

Two catalytic hydrotreatment plants were added to the refinery, with one to be used to produce diesel and the other a diesel blending unit, YPF said.

The catalytic hydrotreatment plants will allow the refinery to prouduce "cleaner and better quality fuels, allowing YPF to have products that comply with the highest environmental and automotive technology standards," the company said.

Fernandez and Galuccio participated during Wednesday's ceremony in the remote inauguration via video-conference of a new unconventional crude field in Añelo, which is in the huge Vaca Muerta play.

The Argentine government seized control of YPF in May 2012, when Congress approved a bill to expropriate a 51 percent stake in the energy firm from Spanish oil major Repsol, which retains a minority stake in the oil company.

The Fernandez administration accused the Spanish company of using YPF as a cash cow to fund its international expansion.

The World Bank's International Center for Settlement of Investment Disputes agreed last December to hear a complaint filed by Repsol against Argentina's expropriation of its controlling stake in YPF.

The Spanish company filed the suit on Dec. 3, six months after notifying Argentina that it planned to take the dispute to international arbitration unless it received fair compensation for the 51 percent stake seized in its former Argentine unit.

The Spanish oil major is seeking to have the nationalization declared illegal and for Argentina to be forced to reverse the decision or compensate the company for it.

Repsol, which formerly had a 57.4 percent stake in Argentina's largest oil and gas producer but now holds a roughly 12 percent interest, is seeking $10.5 billion in compensation from the Argentine government.

The Spanish company also has taken legal action against the nationalization in courts in Argentina, Spain and the United States. EFE